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ERP Software Market Overview:
Global ERP Software Market is expected to garner $41.69 billion by 2020, registering a CAGR of 7.2% during the forecast period 2014 - 2020. Enterprise resource planning (ERP) is a software that allows organizations to manage their business processes. The role of ERP has transitioned from back office activities to the integration of business processes.
Conventionally ERP software has been extensively used for back office operations, which include production, accounting, inventory control and order management etc. An ERP software consists of multiple software modules and each ERP module is focused on a single area of business process such as material purchasing, inventory control, accounting, finance, HR and marketing etc. These modules can be prepared in accordance to the requirement of the company. ERP software is deployed either as an on premise or cloud based software.
Managing resources efficiently and integration of organizational activities are some of the major features of ERP software. Implementation of ERP increases operational efficiency, consequentially providing the competitive edge to businesses. Increasing operational complexity and rapid changes in business models are some of the major challenges faced by present day businesses. To overcome these challenges, business organizations are rapidly adopting ERP software.
Furthermore, growing competition compels organizations to adopt ERP software in order to remain competitive in the market. The demand for ERP software’s is expected to grow swiftly in the forecast period, owing to its importance in supplementing and synchronizing a company’s business processes. High implementation cost, availability of open source applications and tough competition are some of the major challenges in the market. Cloud ERP software would open-up numerous opportunities for the market as it renders more flexibility to the businesses.
The key driver behind adoption of ERP software in the market is to enhance operational efficiency and transparency within the organization. High penetration of cloud based deployment model is boosting the market growth. However, some of the restraints affecting the business are high cost and the availability of open source applications.
Furthermore, integrated system architecture is a major component of the system as this integration trait enables an enterprise to access the same system across different demographics. This software is also responsible for increasing productivity by reducing expenses and enabling the enterprises get potential ROI. The software can integrate high volume of data as well as processes across a many departments and geographies. It further empowers an enterprise to move their products much quicker, reconcile shipments faster and so on. Nonetheless, the enterprise resource planning software provides organizations access to a multitude of crucial company data. Earlier such data were either unavailable or impossible to derive with other software.
Based on the type of deployment, the ERP software market is categorized into on premise deployment and cloud deployment. Cloud deployment is expected to grow dynamically in the near future due to the low IT infrastructure cost associated with it. The function segment includes finance, human resource (HR), supply chain and others. The verticals include the key industries such as manufacturing & services, BFSI, healthcare, retail, government utilities, aerospace and defense, telecom and others. The end-user segment in the ERP software market includes large, medium and small enterprises.
Competitive Intelligence on prominent manufacturers of ERP software provide key insights in terms of strategies implemented to gain significant share in the ERP software market. Some of the leading manufacturers profiled in this report includes Oracle, IBM Corp., Microsoft Corp., SAP, Infor, Sage, Netsuite Inc., Totvs, Unit4 and SYSPRO among others.
Value chain analysis
An ERP value chain comprises of four different stakeholders, which are element provider, application developer, distributor and service provider and end-user. Each stage has specific value at their point of operation, which in turn contributes to add value to final ERP solution. In the current scenario, the software vendors develop applications, which they sell either directly or through distribution channel to consumers. These distribution partners implement changes within the system, which are labelled as add-ons to the core ERP. These add-ons are then implemented in order to customize the ERP for a specific customer. In some cases, the customer further develops the ERP system either by configuration or by customization. The end-deliverables by each player enhances the value associated with R & D activities, innovations and services.
Top Winning Strategies
The top market players in the global ERP software market are adopting different strategies to remain competitive in the global market. The key developmental strategies are product launches, acquisitions, partnerships and collaborations. Product launches is the most widely adopted strategy by the top market players throughout the forecast period. Also, acquisition is the second most adopted strategy.
Top Impacting Factors
The significant influencing factors include operational efficiency and transparency, emergence of new market segment and emerging trends of cloud. These are key factors that have led to the adoption of ERP solution. Along with the above-mentioned factors, the ERP software market is also dependent on increased access to application via mobile devices. All the aforementioned factors impact the overall ERP software market size. Factors such as high initial cost and availability of open source applications limit the adoption of ERP solution. However, each factor would have its definite impact on the ERP software industry.
Top Investment Pockets
The telecom vertical is regarded as the most attractive vertical. The demand for telecom services has increased with an increase in deregulation and consumer awareness. Therefore, telecom industry needs automated features of ERP to reach more and more customers and to handle the increased needs of customers on real time basis. High demand for industry-specific functions, which support sales and order management, convergent billing and charging, receivables management and customer relationship management are the major factors due to which operating players in the telecom industry would look towards ERP software as better solutions. Also, Healthcare vertical holds significant potential for ERP software. Due to rapid rate of their business expansion, hospitals have started using ERP software to provide better service offerings and track real data.
Segment Overview
The two widely used deployment models in the market are on-premise and cloud. On-premise model in comparison to cloud model, accounts for the larger market size by value as it allows in-house IT staff to improve the software or customize it for particular business use. Over the period, cloud enabled ERP solutions market should grow rapidly. This rapid growth is attributed to low initial cost associated with implementation of cloud enabled ERP and the flexibility offered by cloud based solutions. Among various functions of ERP, finance would grow rapidly as most of the enterprises would become more aware about finance function in their business. The market is analyzed from the perspective of verticals such as manufacturing & services, BFSI, healthcare, retail, government utilities, aerospace and defense, telecom and others. Presently, manufacturing & service sectors are driving the market as it helps organizations to improve their operational efficiency and productivity. North America is the highest revenue-generating segment in 2013. However, Asia-Pacific would be the leading market by 2020 during the forecast period. Ongoing development and entry of global level companies would open-up numerous opportunities in the region during the forecast period.
Key Benefits
- The study provides an in-depth analysis of the global ERP software market with current and future trends to elucidate upon the imminent investment pockets in the market
- Current and future trends are outlined to determine the overall attractiveness and to single out profitable trends in order to gain a stronger foothold in the ERP software market
- The report provides information regarding key drivers, restraints and opportunities with ERP software market analysis
- Quantitative analysis of the current market and estimations through 2013-2020 are provided to showcase the financial appetency of the market
- Porters Five Forces model and SWOT analysis of the industry illustrates the potency of the buyers & suppliers participating in the ERP software market
- Value chain analysis in the report provides a clear understanding of the roles of stakeholders involved in the value chain
- ERP software market share analysis for key players
Erp Software Market Key Segments
By Deployment
- On-premise deployment
- Cloud deployment
By Functions
- Finance
- Human resource (HR)
- Supply chain
- Others
By Verticals
- Manufacturing & Services
- BFSI
- Healthcare
- Retail
- Government Utilities
- Aerospace and defense
- Telecom
- Others
By End-user
- Large enterprises
- Medium enterprises
- Small enterprises
By Geography
- North America
- Europe
- APAC
- LAMEA
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